In just a few days, Premier Stelmach and his government will respond to the recommendations of Alberta’s Royalty Review Panel. Expert after expert has pointed out that Albertans should and could be getting more value for the oil, gas, and oilsands resources we own; and that Albertans have lost out on years of royalty revenues because of government inaction.
The Our Fair Share royalty report provides a rare opportunity to make a break with the past in what many are a calling a legacy-defining moment for the Premier. That’s true, but having just become a father this summer, I can’t help thinking that we’re forgetting the most important piece of the puzzle. It’s about the future. Royalty reform will matter even more to my son than it matters to me, because building a sustainable, diversified economy for tomorrow depends on earning and investing fair returns from our energy resources today.
I started wondering what my son will think in the future when he learns about how we agonized over the royalties debate back in 2007. If Premier Stelmach chooses to implement the full recommendations and delivers Albertans’ their fair share, this is what I think Kael John might have to say 23 years from now:
October 1, 2030
Dear Mr. Stelmach:
This year, I graduated from the University of Alberta with a degree in nanotechnology and I got a job with one of the world’s most successful companies, headquartered in Calgary. But it wasn’t until my convocation that I learned how a decision you made as Premier contributed to my good fortune.
Our University President gave a speech about having foresight and courage to stand up for the good of Albertans. The centrepiece of her speech was the decision you made to reform energy royalties in 2007. That might not surprise you; but when I talked to my parents after the ceremony, I had to admit I’d never heard anything about it. Of course, they just laughed and suggested I do some research.
When I started scanning newspaper headlines from those days, it was like watching a melodrama. All those predictions of doom and gloom! Maybe you already knew it was much ado about nothing, but your refusal to be bullied — or to weaken the Royalty Panel’s compromise to soothe tempers — was commendable all the same. In the face of all that opposition, you stood up for Albertans and implemented the Our Fair Share recommendations in full.
I can see how the expertise and honesty of the Review Panel you appointed was helpful. They reminded Albertans that, as citizens, we own the province’s resources and need to “think like owners”, a fact that was somehow being forgotten and ignored. But even more important were your own choices about how to invest the extra $2 billion worth of royalty revenues Albertans started earning each year. Your foresight in recognizing the need to diversify Alberta’s economy built the sustainable, prosperous society we have to today.
For my generation, it’s inconceivable that our parents’ livelihoods and quality of life were so completely dependent on one, inherently unsustainable sector. I can’t imagine having to ride the rollercoaster of “booms” and “busts” year after year, always waiting for the bubble to burst. Nor can I imagine being so dependent on the market price of a single commodity and the whims of one powerful industry.
Fortunately, we have so many more choices today. Your government’s investments in education made our universities the world-class research and teaching institutions that they are, leading the way in medicine, engineering, information technology, social sciences and the arts. Businesses are commercializing discoveries in every one of those fields.
And you didn’t abandon Alberta’s tradition of providing the world with energy either. The Heritage Fund for Sustainable Energy helped us develop energy solutions that protect climate, water and land, and use this province’s abundant wind and solar resources. Now that exporting this technology is everyday business, it’s funny to read the 2007 headlines full of “no-can-do” pessimism about global warming.
In fact, the more I read, the more I can see how your decision on royalties came to shape this province’s sustainable success. In 2007 you got it right — you listened to Albertans, you solicited quality advice, and you followed through with courage and foresight.
As a result of your leadership, my generation and generations to come have a solid opportunity to flourish. For that I owe you my deepest thanks.
Sincerely,
Kael John Raynolds Knechtel
Born August 3, 2007
Marlo Raynolds is the Executive Director of the Pembina Institute. His son, Kael, born Aug. 3, 2007, will be 23-years-old in 2030. You can download reports, fact sheets and other information on royalty reform and sustainable energy solutions at www.pembina.org.
